STZ unable to break through key resistance level
Constellation Brands Inc. (STZ) Technical Analysis Report for May 17, 2019 | by Techniquant Editorial Team
STZ ended the week 0.77% higher at 204.79 after losing $2.01 (-0.97%) today on low volume, slightly underperforming the S&P 500 (-0.58%). Trading $2.58 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (STZ as at May 17, 2019):
Friday's trading range has been $2.90 (1.41%), that's below the last trading month's daily average range of $3.69. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently significantly lower than usual for STZ. Prices continued to consolidate within a tight trading range between 203.62 and 207.79 where it has been caught now for the last three trading days.
Two candlestick patterns are matching today's price action, the Bearish Hikkake Pattern and the Shooting Star which are both known as bearish patterns. The last time a Bearish Hikkake Pattern showed up on February 28th, STZ actually gained 1.64% on the following trading day.
Unable to break through the key technical resistance level at 207.66 (R1), the stock closed below it after spiking up to 207.67 earlier during the day. The failure to close above the resistance could increase that levels importance going forward. Constellation Brands was sold again around 207.67 after having seen highs at 207.53, 207.79 and 207.25 in the last three trading sessions. Obviously there is something going on at that level.
Though the share is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could accelerate should prices move above the close-by swing high at 207.79 where further buy stops might get activated.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous three Highs" stand out. Its common bearish interpretation has been confirmed for Constellation Brands. Out of 20 times, STZ closed lower 60.00% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after two trading days, showing a win rate of 65.00% with an average market move of -0.17%.